Case Law Details
Nagarjuna Oil Corporation Ltd Vs ACIT (ITAT Chennai)
ITAT Chennai held that levy of penalty u/s. 271(1)(c) of the Income Tax Act alleging furnishing of inaccurate particulars of income unsustainable as the matter is highly debatable.
Facts- The only common issue here is with regard to confirming the levy of penalty u/s.271(1)(c) of the Income Tax Act relating to interest income claimed by assessee, on the pre-commencement of business period, as capital receipt as against assessed by AO as revenue receipt. According to AO, the assessee has concealed the particulars of income and also furnished inaccurate particulars of income.
Conclusion- Held that the assessee has made complete disclosure of facts and only issue is whether the interest received on idle funds lying with banks in the shape of fixed deposits is a capital receipt or revenue receipt. This, being a highly debatable issue, the assessee is exigible to penalty u/s.271(1)(c) of the Act, for furnishing of inaccurate particulars of income. In our view, this being a highly debatable issue and once there is a debate as assessee’s present case, Hon’ble Madras High Court has admitted the substantial question of law against the order of Tribunal in quantum, we are of the view that assessee is not liable for penalty u/s.271(1)(c) of the Act. Hence, we delete the penalty levied by AO completely in both the assessment years and allow both the appeals of assessee. Consequently, the Revenue appeals are dismissed.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
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